EU Competition

Commission consults on commitments offered by container liner shipping companies.On 16 February 2016, the European Commission (Commission) announced that it is inviting comments from interested parties on commitments offered by fifteen container liner shipping companies, under Article 9 of Regulation 1/2003, to address competition concerns in relation to the companies’ practice of publishing future pricing information on their websites or other means. While such price announcements, known as General Rate Increases or GRI announcements, do not provide full information on new prices to customers, they allow carriers to explore each other’s pricing intentions and coordinate their behaviour. To address these concerns, the shipping companies have offered to stop publishing and communicating the price increases, make pricing more transparent for customers, and limit the time window for any price announcements. A summary of the proposed commitments has been published in the EU’s Official Journal of the European Union (OJEU).

Study on geographic market definition in Commission merger control. On 16 February 2016, the Commission published a detailed report by the Centre for Competition Policy, University of East Anglia, evaluating the Commission’s recent practice in relation to defining the geographic market in merger cases. While the report provided a number of recommendations for improvement, it also provided an overview of the Commission’s strengths. A total of ten cases in which geographic market definition was a key issue were examined. The Commission’s geographic market analysis in terms of the methodology used; the way in which the Commission incorporated constraints from outside the geographic market in its assessment; and whether a more flexible approach to supply-side substitution could have been considered, and whether such an approach might have changed the outcome of the case were all issues which were considered in the report. In particular, the report found no evidence that the Commission’s approach to geographical market definition has led to poor merger decisions. It also found that the Commission’s analysis of external competitive constraints and definition of geographic markets has set an appropriate framework; that where geographic markets are drawn narrowly, the Commission typically gives careful consideration to evidence of competitive constraints from outside the market; and that the Commission draws on a wide range of evidence for its findings, rarely relying on one single piece of evidence or analysis.

EU Mergers

Phase I Mergers

  • M.7891 THE CARLYLE GROUP / COMDATA (12 February 2016)
  • M.7824 VITA CENTRAL EUROPE / WALMARK (12 February 2016)
  • M.7866 ACTIVISION BLIZZARD / KING (15 February 2016)
  • M.7726 COTY / PROCTER & GAMBLE BEAUTY BUSINESS (16 February 2016)
  • M.7907 SPHINX / CVC CAPITAL PARTNERS / RAC (17 February 2016)
  • M.7929 MITSUBISHI CORPORATION / KKR / SOUTH STAFFORDSHIRE PLC AND ASSOCIATED COMPANIES (17 February 2016)

State Aid

Commission approves prolongation of Austrian short-term export-credit insurance scheme. On 15 February 2016, the Commission announced its decision to approve the prolongation until 31 December 2020 of the Austrian short-term export-credit scheme (which was originally approved in 2009). The Commission found that private insurers are supplying exporters with various insurance products to cover the risk of non-payment by foreign buyers, however, that there is a lack of such coverage for risks of non-payment by foreign buyers as a result of natural and man-made catastrophes. The Austrian scheme enables the State to provide reinsurance to insurance companies active in Austria that cover these risks incurred by exporters on the basis that the risk that State intervention will crowd out existing suppliers is eliminated (as such coverage is not provided by the market, at present).

ECJ ruling on German appeal against General Court judgment regarding aid granted to company for disposal of animal carcasses. On 18 February 2016, the ECJ handed down its judgment on an appeal by Germany against a General Court judgment relating to a Commission decision which concluded that annual payments from the State to Zweckverband Tierkörperbeseitigung in Rhineland-Palatinate (ZT) for the disposal of animal carcasses and slaughterhouse waste were not in line with EU rules on State aid. The Commission ordered Germany to recover the unlawful State aid accordingly. In July 2014, the General Court rejected claims that the Commission had erred in concluding that ZT did not provide a service of general economic interest and that annual payments to ZT from the State could not be justified as public service compensation. The ECJ concluded that the General Court had made no error in its assessment.

Trade

EU commences antidumping investigation into thermal paper from South Korea. On 18 February 2016, the Commission announced that, following a complaint pursuant to Article 5 of Council Regulation (EC) No 1225/2009 from the European Thermal Paper Association, it has opened an investigation to assess whether imports into the EU of lightweight thermal paper from South Korea have been unfairly dumped. Evidence provided by the complainant has shown that the volume and the prices of the imported product under investigation have had, among other consequences, a negative impact on the quantities sold, the level of prices charged and the market share held by the Union industry, resulting in substantial adverse effects on the overall performance, the financial situation and the employment situation of the Union industry. It is expected that the investigation will be concluded within 15 months of the date of the publication of the notice relating to the initiation of proceedings in the OJEU.

UK Competition

High Court finds no abuse by Google in online maps case. On 12 February 2016, the High Court handed down judgment on a preliminary issue in an action brought by Streetmap.eu Limited (Streetmap) against Google Inc., Google Ireland Limited and Google UK Limited (together, Google). Streetmap claimed that Google abused its dominant position in the market for online search and online search advertising, in breach of the Chapter II prohibition of the Competition Act 1998 and Article 102 of the TFEU, by bundling Google Search with Google Maps, thereby depriving users of an undistorted choice of online mapping services; giving Google Maps an unfair advantage over Streetmap and/or producing discriminatory effects; and displaying a thumbnail map at or near the very top of its search engine results page of a clickable image from Google Maps, and no other map, in response to certain geographic queries, and the consequent relegation of a blue link to Streetmap to lower down the page. The High Court found that Google did not commit an abuse.

CMA fines pharmaceutical companies in relation to delaying generic entry of drug. On 12 February 2016, the Competition and Markets Authority (CMA) announced that it has fined GlaxoSmithKline (GSK) as well as two suppliers of generic versions of the antidepressant drug, paroxetine, Alpharma Limited (Alpharma) and Generics (UK) Limited (GUK) (and relevant parent or successor companies), a total of £44.99 million for entering into “pay-for-delay” agreements which delayed generic entry of paroxetine into the UK market, in breach of Chapter I of the Competition Act 1998 and/or Article 101 of the TFEU. The CMA also found that GSK infringed the Chapter II prohibition by making cash payments and other value transfers to induce GUK, Alpharma and also IVAX Pharmaceuticals UK (IVAX) to delay potential independent entry to the UK paroxetine market. The CMA excluded an agreement between GSK and IVAX from the Chapter I prohibition by virtue of the Vertical Agreements Exclusion Order.

Ofcom closes investigation into alleged abuse of a dominance in the wholesale supply of Sky Sports 1 and 2. On 16 February 2016, Ofcom closed its investigation into the alleged abuse of dominance in the wholesale supply of Sky Sports 1 and 2 (SS1&2) by British Sky Broadcasting Group plc (Sky) following a complaint brought by British Telecommunications plc (BT). BT alleged that Sky had offered wholesale supply of SS1&2 to BT’s YouView platform conditional upon BT wholesaling BT Sport channels to Sky for retail on Sky’s satellite platform. BT has now obtained access to SS1&2 on a non-reciprocal basis for its YouView platform, as requested by the company in its complaint, and Ofcom has stated that it believes the principal risk to the interests of the consumers identified in the complaint has been eliminated. As such, Ofcom also stated that it had not reached any conclusion in relation to the merits of the complaint.